CPI inflation in Pakistan slows to 2.41%, sharpest decline in nine years

Pakistan's consumer price index (CPI) inflation dropped to 2.41% year-on-year (YoY) in January 2025, marking its lowest level in 111 months, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday.

The inflation rate reflects a sharp disinflationary trend, down from 4.1% in December 2024 and significantly lower than 28.3% in January 2024.

On a month-on-month (MoM) basis, inflation saw a slight increase of 0.2% in January, compared to 0.1% in the previous month.

Financial analysts note that the declining inflation rate is a major shift from last year's record highs, providing some relief to consumers.

However, key food and non-food items continued to witness notable price hikes, particularly in the rural sector.

Food and non-food price trends

In urban areas, the highest YoY price increases were recorded for potatoes (45.14%), gram flour (44.72%), and pulse gram (41.73%), while non-food inflation was driven by motor vehicle tax (168.79%), footwear (31.88%), and medical services.

In rural areas, food items such as potatoes (49.32%), gram flour (45.85%), and pulse gram (45.24%) saw steep price hikes, alongside motor vehicle tax (126.61%) and education costs (23.41%).

On a month-on-month basis, chicken prices surged by 35.26% in urban areas and 33.02% in rural markets, while sugar, fresh fruits, and cooking oil also saw notable increases.